AVZ share price rockets 19% on 'watershed moment'

AVZ shares were rocketing this morning…

| More on:
Man with rocket wings which have flames coming out of them.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • AVZ has been granted a mining licence for the Manono Project
  • If all goes to plan, production will commence during late 2023
  • A legal wrangle appears to be offsetting some of this news

The AVZ Minerals Ltd (ASX: AVZ) share price rocketed out of the gates this morning.

In early trade, the lithium explorer's shares were up 19% to $1.18.

The AVZ Minerals share price has since pulled back but remains up 6.5% to $1.06.

Why did the AVZ share price rocket higher?

Investors were bidding the AVZ share price higher this morning after the lithium explorer provided an update on the Manono Lithium and Tin Project in the Democratic Republic of the Congo.

According to the release, the Minister of Mines has awarded a mining licence to AVZ's 75% owned Dathcom Mining SA business for the flagship Manono Project.

The mining licence will cover the entirety of the Roche Dure mineral resource (401 million tonnes at Li20 1.65%) and the Carriere de l'Este exploration target. It does, however, exclude a portion of the land holding to the north. AVZ intends to have discussions with the government in the near future regarding this land.

The company is now advancing its early works program ahead of a final investment decision to commence major works and first production toward the later months of 2023.

"A watershed moment"

AVZ's Managing Director, Nigel Ferguson, was pleased with the news. He said:

"The receipt of the Ministerial Decree to award the Mining Licence is leading to a watershed moment for AVZ and our partners, with the official award of the Mining Licence from CAMI expected in a matter of days.

This paves the way for AVZ to start developing what is arguably one of the most important new mining projects in the world that will significantly contribute to the global green energy transition, while also uplifting the lives of the Congolese people who will contribute and receive sustained benefits from the Project for many decades to come."

Legal wrangle

Taking some of the shine off the update was news that AVZ has been caught up in a legal wrangle.

This is in respect to a claim that La Congolaise D'Exploitation Miniere SA has transferred a 15% interest in Dathcom to Jin Cheng Mining Company.

It commented:

"In relation to the Cominiere Transfer Claim, the Company notes any such purported transfer would be restricted under the terms of the existing shareholders agreement between the Dathcom shareholders and accordingly, any purported transfer of the 15% interest to a third party would be a material breach of the pre-emptive rights contained in the existing Shareholders Agreement owed to AVZI, invalid and of no force or effect.

The Company has considered each of the Dathomir Claim and Cominiere Transfer Claim in detail and believes them to each be spurious in nature, without merit, contain fundamental and material errors, and have no substance or foundation in fact or law. The Company is continuing to take all necessary actions to resist these vexatious and meritless claims and to protect Dathcom's and its interests, and the Company will consider all options including engaging with the DRC Government and seeking international law remedies."

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

a sad looking engineer or miner wearing a high visibility jacket and a hard hat stands alone with his head bowed and hand to his forehead as he speaks on a mobile telephone out front of what appears to be an on site work shed.
Resources Shares

Down 14% in 2024, why is the BHP share price sliding again today?

ASX 200 investors are bidding down the BHP share price on Wednesday.

Read more »

A mining employee in a white hard hat cheers with fists pumped as the Hot Chili share price rises higher today
Resources Shares

These ASX 200 mining stocks could rise 40% to 50%

Analysts think these miners are dirt cheap at current levels.

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Fortescue share price leaps 5% as electric machinery makes a milestone

Fortescue is charging ahead with its electric mining ambitions.

Read more »

rising mining asx share price represented by happy woman miner in hard hat
Resources Shares

Why the BHP share price crushed the benchmark this week

BHP shareholders enjoyed a rewarding week.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Dividend Investing

Here is the profit forecast to 2026 for BHP shares

Let’s unearth how much profit this miner could make.

Read more »

Female miner standing next to a haul truck in a large mining operation.
Resources Shares

Is the worst of the selling now over for ASX iron ore shares?

ASX iron ore giants like BHP, Rio Tinto and Fortescue rebounded this week after falling hard in 2024.

Read more »

Three satisfied miners with their arms crossed looking at the camera proudly
Resources Shares

Why are ASX 200 mining shares smashing the benchmark on Wednesday?

Rio Tinto, BHP and Fortescue shares are all charging higher today.

Read more »

Two miners standing together.
Resources Shares

Why is the South32 share price getting battered today?

ASX 200 investors are bidding down South32 shares today.

Read more »